Part 2 of the Land Reform (Scotland) Act 2025 (the Act) significantly changes the law on the leasing of agricultural land.
We posted an article in April 2024 on the resumption proposals when the Land Reform (Scotland) Bill (the Bill) was at its earliest stage in the parliamentary process.
The Net Zero, Energy and Transport Committee (the Committee) undertook its Stage 1 scrutiny of the Bill, culminating in a report published in March 2025.
Generally, the Committee welcomed the changes proposed in relation to the leasing of land as a step forward in encouraging more people to the sector and allowing them to more fully play a role in tackling the climate crisis.
Notably, however, the Committee recommended that the Scottish Government reconsiders the reform of provisions on resumption and further consider how the sector can encourage the leasing of land for agriculture as having a vital role in supporting rural development and delivery on Scotland's goals on sustainability and achieving net zero.
Where are we now?
The Act received Royal Assent on 16 December 2025 but, at the time of writing and like many provisions in the Act, the resumption provisions of the Act have not yet been brought into force by secondary legislation.
The Act does not deviate too far from the proposals in the Bill but there are some important changes to be aware of.
This article summarises the provisions of the Act applying to resumption when they are brought into force.
Procedure: the key changes
The right to resume land from fixed duration tenancies has always been subject to the statutory provisions of the Agricultural Holdings (Scotland) Act 2003 whereas a landlord's ability to resume from a 1991 Act tenancy has previously largely enjoyed freedom of contract.
The changes in the law are significant and retrospectively alter, in the case of 1991 Act tenancies, the terms of pre-existing leases and, in respect of fixed duration tenancies, the previous statutory provisions.
1991 Act tenancies
Landlords must now provide tenants with at least one year’s written notice of their intention to resume part of the holding from the tenancy. This will override any shorter notice period prescribed in the lease. Importantly, it remains the case that the lease must contain a contractual a power of resumption. The Act does not afford landlords a statutory power to resume land, only a new statutory procedure to follow.
A copy of the resumption notice does not need be sent to the Tenant Farming Commissioner (TFC) – as was proposed in the Bill – removing an administrative step and a degree of oversight by the TFC. The TFC’s role in appointing a valuer (more on that below) in the absence of agreement remains.
All tenancies
The resumption notice must nominate a valuer who meets the statutory qualifications to be appointed. This was not proposed in the Bill.
On receipt of the resumption notice, the tenant is entitled to serve – within six weeks (increased from 28 days as proposed by the Bill) – a counternotice to terminate the tenancy on the date on which the resumption was to have taken effect. Unless and until a counternotice is served, the landlord is permitted to withdraw the resumption notice but will be liable for losses or expenses incurred by the tenant.
If the tenant does not dispute the notice or serve a counternotice to terminate and provided that the landlord does not withdraw the resumption notice, we move to assessment of compensation.
Compensation: the key changes
In addition to the statutory heads of claim for compensation (such as disturbance) and a rent reduction following exercise of a landlord's right of resumption, the Act creates an additional head of claim applying to 1991 Act tenancies and all fixed duration tenancies.
The Act describes this as compensation of the tenant’s interest in the value of the land being resumed.
This equates to the tenant having a share in the capital value of the land to be resumed. The Act sets out the mechanism and parameters to be followed for the valuer to come to a determination of this sum. An amendment to the Bill had been brought forward which sought to calculate the compensation based on the value of the tenant’s interest in the lease, not the land subject to the lease. This amendment was not passed and the new head of claim for compensation is linked to the value of the land.
The valuer must look at the vacant possession value of the land being resumed as against the value of that land subject to the tenancy. The compensation payable to the tenant is to be 50% of the difference. The Act prescribes the content of and timetable for the valuer's notice of assessment of that sum. Foreseeing scope for dispute, the Act creates a short appeal window of three weeks should either landlord or tenant seek to challenge any matter contained in the assessment.
For fixed duration tenancies, the Scottish Ministers will be empowered to change or clarify the method for determining the capital value compensation. That power will cease after 17 December 2030. No equivalent power exists in respect of 1991 Act tenancies.
Next steps
The change in procedure for 1991 Act tenancies represents a significant departure from the usual contractual provisions on resumption and the new head of claim for all types of tenancies is a material alteration to the previous law, linking part of the compensation package to a share in the capital value of the land being resumed from the tenancy.
The right to resume, on relatively short notice, has previously provided landlords with a mechanism to have sensible conversations with tenants about giving up areas of land which would be susceptible to the resumption process and, importantly, to give landlords comfort that they can obtain possession where, for example, a developer may be exercising an option. A longer statutory notice period removes that flexibility and may result in land not being let or only let on very short-term arrangements.
We recommend that landlords and tenants review their existing leases and timetables for their duration to ensure alignment with any projects coming down the tracks and to take advice on the valuation implications of compensation to remain informed in their discussions and plans.
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